Challenging year for retail, but store owners are hopeful

By Melissa Mixon Friday, 20 November 2009

CEDAR PARK — Some local store owners have reason to be optimistic this holiday season, despite the struggling national economy and lower-than-expected sales returns from last year.

Sales at several Cedar Park and Leander businesses are already higher than last year’s and, with the holidays just around the corner, retailers are coming up on the busiest shopping time of the year.

“I’m going to have a good Christmas,” said Yong Madayong, owner of Arttie Casual, a women’s clothing and apparel store located in Cedar Park’s 1890 Ranch shopping center. The store opened in June and, in comparison with other dress shops Madayong owns, it has seen a 2 percent increase in sales.

“I believe this year will be a little better than last year,” she said.

Consumers are still closely watching their spending, however.

In an annual survey released last month by NPD Group Inc., a leading market research company, 30 percent of consumers who were surveyed reported they plan to spend less this holiday season—a 4 percent increase over last year.

“That 4 percent increase is certainly a sign of the times.” Marshal Cohen, a chief industry analyst for the group, said in a statement.

Some local businesses have ramped up their advertising and offered special sales and discounts to draw customers into their stores over the past year.

At Arttie Causal, Madayong is offering a 20 percent discount on shoes, which she believes will drive up sales.

Good times and bad times

Though the economy’s decline was not as obvious until last summer, local businesses felt the effects well before then.

For Craig and Elizabeth Berry, the trouble started in December 2007, when sales at their store in Cedar Park, Collectible Caboose, started to flatten out.

The couple opened the shop, which specialized in model trains and featured a gift shop with hard-to-find collectible items, six years earlier.

They invested everything they had into the store, so when sales started to decline, the Berrys did all they could to save it.

“I started coming up with scenarios saying, ‘If we can do this, what are the different scenarios and can we make it work? But I couldn’t find one that worked unless the economy did a major turnaround,” Craig said. “And, frankly, I couldn’t bet on that.”

In September, the Berrys had to close their business, a decision that Craig describes as “agonizing.”

“This was my baby,” he said.

For Ruben de la Rosa, owner of Davlynn’s Gifts and Craft Mall, the economy’s decline has had a negative effect, but it has been less painful. He had less foot traffic in his store, but after relocating it to the Village Belle Shopping Center in Cedar Park he said there has been an increase in customers.

Still, they are shopping differently than before.

“They’re just coming in for certain specific items and that’s it,” he said.

Some local residents, in line with national retail surveys, said they have shopped more frugally this year, going for the things they really need and not just the things they want.

That lack of luxury shopping has not hurt Cedar Park Jewelry and some other retailers in the area, however.

With 280 customers in one week, Bryan Aaron, operations manager for the store, set a record in October for the most number of people in the store. Sales at the business have been up, something Aaron attributes to increased advertising, quality prices and a gold buy-back program.

“People are still getting married and falling in love, but some people are doing it on a budget,” he said.

For Cedar Park, the biggest boost to its retail this year has been from the 1890 Ranch shopping center.

Charlie Northington, principal for Austin-based Endeavor, which developed the project, said tenants there have experienced “better than expected sales” in the past year.

The development had a small hiccup after the first phase opened in October 2007 and a year later one of its anchor stores, Circuit City, closed.

The closure, however, came after Circuit City announced that it would close 155 of its stores nationwide.

Northington said the 1890 Ranch development has been successful because it has a strong customer following.

Retail’s effect on the city

The success of retail in a city does not just affect businesses.

Money generated from a city’s sales tax helps to pay for everything from city road construction to park development. So when those numbers are down, cities must make up for the shortfalls.

The sales tax in Cedar Park and Leander was lower than expected this year, but it was still more than the amount generated last year—something for which city officials say they are grateful.

“I think every department director was watching those [sales tax] numbers closely,” said Phil Brewer, Cedar Park’s director of economic development. “We all got maybe a little spoiled seeing 20 percent increases on an annual sales basis, so it caught everybody off guard when the economy turned the other direction.”

The cities and their chambers of commerce have done their part to support local businesses.

In February, Leander’s Chamber of Commerce started visiting businesses once a week to see how they were doing and to show support, said Mary Bradshaw, executive director of the chamber. The chamber’s Leander Business Circle also hosts monthly meetings where business owners can network and talk.

“They could tell their stories but they were very honest,” Bradshaw said. “I was hearing a lot of hope.”

Holiday season

Local store owners are optimistic about holiday sales this year, though they acknowledge that shoppers may be cautious.

“We’ve tried to be really attuned to what our customers are experiencing,” said Gary Anderson, general manager of H-E-B Plus in Leander. “We want to make sure we’re providing them the best value.”

Anderson said he expects customers to spend about the same as they did last year at the store.

Yvonne Guevara, assistant manager at Charming Charlie in 1890 Ranch, said shoppers will put more thought into gifts.

“It’s not just splurging anymore. It’s more like, ‘This is going to fit this person really well,’ and [shoppers are] thinking about what they’re spending their money on,” she said. “It’s a good mind-set to be in.”

Both Leander and Cedar Park had a higher sales tax revenue this fiscal year over last year. However, the amount was less than they expected. To make up for the shortfall, officials in Leander and Cedar Park raised deductables for city employees and reduced staff travel and training costs in the 2009-2010 budget. Cedar Park also froze 13 non-public safety positions.

Shop local

The chambers of commerce in Leander and Cedar Park are currently promoting “shop local” campaigns.

In Cedar Park, chamber members are encouraged to shop locally, and coupon books listing local businesses are distributed to visitors, said Harold Dean, president of the city’s chamber.

In Leander, the chamber is doing a series on the value of shopping local in a publication that goes to local businesses and residents.